Nine million Brits are currently budgeting by setting aside funds in envelopes and even jam jars, new research from thinkmoney has claimed.
Nearly one in every six people set money aside for bills in whatever contained they have to hand, rather than keeping it in an account.
This ensures they have enough money to pay for essential bills while fewer than half of the 2,000 adults questioned said they transfer money for bills to another separate account.
Of those who use this technique, 78% transfer funds either to another of their own accounts or to a joint one while 22% transfer it to somebody else’s account, such as their partner’s.
Cash is therefore kept to one side to cover bills so that people are never short on funds when trying to pay for essentials such as utilities and rent.
The risks of relying on memory
However, many people take an old fashioned approach to money management and rely on memory to ensure that bills are paid when they need to be.
Some 53% of respondents said they mentally set aside money for bills and then do not spend it – although this method could be exceptionally risky.
While putting money into a jam jar or envelope may not be the most secure way of managing finance, it is an effective way of budgeting. Relying on memory on the other hand can be risky, especially as many people have multiple incomes and many different bill payments to manage.
It is very easy to lose track and individuals could end up spending more than they have budgeted for, which is why careful consideration of finances is required.
Using bank accounts or prepaid cards can support those wishing to manage their money in a careful fashion as it is important to only spend what is available.
Some simple ways to save a little extra
The changing state of the economy is aiding some people by meaning they have more disposable income, but paying off the essentials should still come first.
Part of the saving process ahead of the winter could focus on bringing down energy bills as these can be a major outlay for any household, especially when it is colder.
Switching suppliers could mean people can avail of the best deals while even something as simple as taking down the thermostat by one degree could result in a saving.
Only using the heating when the home is occupied can also result in significant savings while methods such as draught proofing doors and windows can aid energy efficiency.